Phase one describes the key steps for planning and preparing the PEFA assessment. Careful planning and preparation are critical to the success of the PEFA assessment. Phase one establishes the basis for the government’s engagement in, and ownership of, the assessment process. It also defines the objectives, scope, coverage and resources required for the PEFA assessment. Phase one can take up to six months, but may be longeor shorter, depending on the extent of agreement between stakeholders and readiness to undertake the assessment.




Step 1 examines the need for a PEFA assessment, usually through dialogue between senior government officials and other stakeholders, including development partners. The dialogue may be initiated as part of development support strategic discussions between the government and development partners, or as part of preparation for budget support operations. Governments themselves often initiate a dialogue on successive PEFA assessments to follow a previous report. The main considerations in deciding whether a PEFA assessment would be useful include:

  • What PFM and policy objectives are the government seeking to address and what are their needs in addressing them?
  • Have there been any other recent diagnostic assessments of PFM or related matters that might help to identify and analyze PFM reform needs or actions?
  • How can PEFA help stakeholders to understand and address PFM reform needs?
  • Does PEFA provide a timely and cost-effective contribution to PFM reforms?
PEFA Handbook Volume 1: The PEFA Assessment Process – Planning, Managing and Using PEFA
  • How long ago was the previous PEFA assessment?
  • Are there other actions that may be needed and how are they related to PEFA?

Following agreement in principle to conduct a PEFA assessment by government, development partners and other parties supporting the assessment, a process is needed for gaining formal approval and for designing and undertaking a PEFA assessment.


PEFA Handbook Volume 1: The PEFA Assessment Process – Planning, Managing and Using PEFA